Deploying commercial rooftop solar. Chris Jardine Technical Director, Joju Solar

Transcription

1 Deploying commercial rooftop solar Chris Jardine Technical Director, Joju Solar

2 Commercial Rooftop Solar Rocket-boosters, or remaining barriers? Dr Christian N Jardine Technical Director, Joju Solar Senior Researcher, Environmental Change Institute, University of Oxford Solar Power UK Dr Christian N Jardine

3 Market overview & policy context Large commercial case study Some economic context Barriers to implementation Making FiTs business friendly

4 Solar Buildings Market Domestic Small Commercial Large Commercial 2kW 50kW 150kW % 15-18% 16-20% 10yr 7yr 5-6yr 8000/month 200/month Just a handful

5 Rocket-boosters! Ambition to promote commercial roof-top is clear and unambiguous Lifting floor on permitted development to 1MW Allow transfer between owners? Is this enough and does it address real barriers?

6 Some questions Why so much ground mount (>GW) compared to buildings? Ground mount competes with wholesale electricity Building compete with retail electricity Why so few commercial buildings being installed, when returns are so strong? What makes the buildings sector different?

7 Case Study Pepsico (Copella fruit juice factory) 150kW Renesola 250W 5 x Power One 27,6 inverters 2 weeks

8 Pepsico Issues H&S standards very high; needs experience Logistics around food processing, hygiene Space was limited - inverters outside Logistics - apple deliveries 24hrs a day Shutdown needed careful management Had to meet their P&L targets; internal financial sign-off

9 Cost Parity Implies cost of solar electricity will cross-over with conventional Can argue it s already happened But depends on how you calculate

10 Price of PV vs. current grid Price 50kW 60k Generation (kwh) Used on site (kwh) Price/kWh supplied Retail electricity Cost parity Proportion used on site seems critical But PV cheapest way of supplying electricity to a commercial building WITHOUT POLICY SUPPORT 6p 10p Yes

11 Discounted cash flow - 50kW Year Absoulte 3.5% discount 10% discount NPV At 3.5% discount (i.e. value the future social discounting) NPV is positive and PV is investable without subsidy at 50kW scale. At 10% discount (i.e don t value the future commercial discounting) NPV is negative and not investable So depends on how businesses value the future are they thinking long-term, sustainable?

12 Short-term decision making We need to see a 5 year payback or else it s just not worthwhile. Businesses can t see beyond short-term High discount rates adopted Businesses don t know if they will be in building (or in business!) in 10 years time Still far too much low hanging fruit

13 Business priorities Yes, I ve got 100k in the bank, but I need to use this to hire more staff. Competing business priorities, so solar not seen as priority But 2 nd diverse income stream has value Only farmers, used to massive risk, really get this

14 Building concerns I m worried about someone coming and drilling a load of holes in my roof. Can be major disruption and cost implications if roof leaks and: Stops production lines Damages stored stock Rent-a-roof payments not seen as covering off this risk

15 People Buildings are full of people Multiple decision makers FM guy wants to go solar Takes to FD Takes to Board Takes to Group board etc. (Re)-education required at every step Can take years Usually, larger the roof, larger the organisation, larger the hierarchy

16 Landlord/tenant split We d like to go ahead but we don t own the building. Have to repeat process with building owners But they see minimal benefit, and don t care about tenants Landlords often change hands more regularly than tenants PFI s are mental.

17 DNO Getting to be a serious issue in many parts of the country Solar farms (especially) soak up available grid capacity No grid capacity left for buildings (even if zero export) Grid is relying on building load to be there to soak up solar farm production

18 What s not a barrier Planning a hindrance, but never seen refused, and timescales less than DNO EPC again an annoyance, but not a barrier These can be done within critical path of DNO application Overall rates of return excellent, but payback is the issue

19 Making FiTs Business friendly Can we address timescale issue with clever policy Parameter 20-year FiT 10-year FiT 5-year FiT FiT 12.1p 15.6p 24p 20 year IRR 17% 17% 17% 10 year IRR 9% 13% 13% Payback 6.5 years 5.5. years 4.2 years Cost of policy 135k 76k 55k Shorter higher FiTs give lower paybacks, same long term rates of return and lower cost to the bill payer

20 Ground vs. Buildings Ground Buildings Developer (+finance led) Installer led Long term planning 10 year decision making Plug and play People socio-technical system Removable, no land issues Building concerns Diversity good Diversity considered distraction from core Access to landowner Landlord/tenant split Few points of contact Hierarchical decision making

21 Domestic vs Commercial Domestic Commercial Installer led Installer led Future planning 10 year decision making Plug and play People socio-technical system Building concerns, but modest Building concerns, potentially serious Income seen as holiday money Diversity considered distraction from core Access to householder Landlord/tenant split One/two points of contact Hierarchical decision making

22 To conclude Substantial fuel price rises expected in the coming years Additional volatility in fuel price market Cost of PV fallen dramatically and continuing to drop Economics excellent, indicating cost parity (or close) even without subsidy But non-economic barriers remain in buildings sector Institutional decision making and culture

23 Thank you for you Attention!! W: T: Official Solar Energy Partners of: